Discriminatory fees, coordination and investment in shared ATM networks

Stijn Ferrari ()
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Stijn Ferrari: National Bank of Belgium, Financial Stability Department

No 184, Working Paper Research from National Bank of Belgium

Abstract: This paper empirically examines the effects of discriminatory fees on ATM investment and welfare, and considers the role of coordination in ATM investment between banks. Our main findings are that foreign fees tend to reduce ATM availability and (consumer) welfare, whereas surcharges positively affect ATM availability and the different welfare components when the consumers' price elasticity is not too large. Second, an organization of the ATM market that contains some degree of coordination between the banks may be desirable from a welfare perspective. Finally, ATM availability is always higher when a social planner decides on discriminatory fees and ATM investment to maximize total welfare. This implies that there is underinvestment in ATMs, even in the presence of discriminatory fees

Keywords: investment; coordination; ATMs; network industries; empirical entry models; spatial discrete choice demand models (search for similar items in EconPapers)
JEL-codes: G21 L10 L50 L89 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2010-01
New Economics Papers: this item is included in nep-ban, nep-com, nep-dcm, nep-mkt and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:201001-29

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